How do I use the CAGR calculator?

1. Enter the initial value: Add the amount invested or the portfolio value at the start of the measurement period. 2. Enter the final value: Add the ending value after all market movement and reinvested gains for the period. 3. Set the time period: Enter the number of years between the start and end values. Use the same dates when comparing two investments. 4. Read the annualized return: The CAGR shows the smoothed annual rate. The calculator also shows absolute gain and total return percentage for context. 5. Use XIRR when cash flows exist: If you added money, withdrew money, or received irregular cash flows during the period, CAGR is not enough. Use XIRR for that case.

CAGR (Compound Annual Growth Rate) is the rate at which an investment grows annually over a specified period, assuming profits are reinvested. It smooths out volatile year-to-year returns into a single annualized figure, making it easy to compare different investments.

How is CAGR different from absolute returns?

Absolute return tells you the total percentage gain or loss over the entire period (e.g., 200% over 5 years). CAGR converts that into an equivalent annual rate (e.g., ~24.6% per year). CAGR is more useful for comparing investments with different time horizons.

What is a good CAGR for investments in India?

It depends on the asset class. Equity mutual funds have historically delivered 12-15% CAGR over long periods. Fixed deposits offer 6-8%. Gold has averaged around 10-11%. A CAGR above the inflation rate (6-7% in India) means your wealth is growing in real terms.

Can CAGR be negative?

Yes. If your final value is less than your initial investment, the CAGR will be negative, indicating your investment lost value on an annualized basis. For example, if ₹1,00,000 became ₹50,000 in 5 years, the CAGR would be approximately -12.9%.

Does CAGR account for intermediate cash flows?

No. CAGR only considers the starting value, ending value, and time period. If you made additional investments or withdrawals during the period, use XIRR (Extended Internal Rate of Return) instead for a more accurate picture.

Tools/

CAGR Calculator

Calculate the Compound Annual Growth Rate of any investment. See how your money actually grew year-over-year.

Initial Investment

₹1,000₹1,00,00,00,000

Final Value

₹1,000₹1,00,00,00,000

Time Period

1 Yr40 Yrs

Compound Annual Growth Rate

24.57%

over 5 years

Initial Value

₹1.0 L

Final Value

₹3.0 L

Absolute Gain

₹2.0 L

Growth Trajectory

Year-by-Year Projected Value

Year	Value
Today	₹1,00,000
Year 1	₹1,24,573
Year 2	₹1,55,185
Year 3	₹1,93,318
Year 4	₹2,40,822
Year 5	₹3,00,000

About the CAGR calculator

Compound Annual Growth Rate (CAGR) converts an investment's total growth into a single annualized rate. It answers a precise question: what steady yearly return would take the starting value to the ending value over the same period?

Use it to compare mutual funds, PMS portfolios, listed stocks, gold, real estate, or private investments across different holding periods. CAGR is more useful than absolute return when two investments were held for unequal durations.

The calculation is a simplification. It assumes no intermediate cash flows and smooths volatility into one rate, so it should not be used for SIPs, staggered purchases, withdrawals, or portfolios with material interim additions.

Frequently Asked Questions

Enter the initial value
Add the amount invested or the portfolio value at the start of the measurement period.
Enter the final value
Add the ending value after all market movement and reinvested gains for the period.
Set the time period
Enter the number of years between the start and end values. Use the same dates when comparing two investments.
Read the annualized return
The CAGR shows the smoothed annual rate. The calculator also shows absolute gain and total return percentage for context.
Use XIRR when cash flows exist
If you added money, withdrew money, or received irregular cash flows during the period, CAGR is not enough. Use XIRR for that case.

CAGR = [(FV / PV)^(1 / n) − 1] × 100

FV is the final value
PV is the present value or initial investment
n is the number of years
CAGR is the annualized growth rate in percent

Absolute return is calculated separately as FV − PV, and total return percent is (FV − PV) ÷ PV × 100.

Worked example

Suppose an investment grew from ₹5,00,000 to ₹12,50,000 over 7 years.

Initial value: ₹5,00,000
Final value: ₹12,50,000
Duration: 7 years
Absolute returns: ₹7,50,000
Total return: 150%
CAGR: 13.99%

The investment grew 2.5 times in value. CAGR translates that total gain into an annualized rate of 13.99%, making it easier to compare with other assets over different periods.

CAGR ignores the path of returns. A volatile equity fund and a steady asset can show the same CAGR over a period.
Do not use CAGR for SIPs or portfolios with interim contributions and withdrawals. XIRR is the more accurate return measure for dated cash flows.
Compare CAGR over similar dates and similar risk levels. A 3-year small-cap CAGR and a 10-year balanced fund CAGR do not measure the same risk experience.
CAGR is pre-tax unless the final value is post-tax. For listed equity and equity mutual funds, long-term capital gains above ₹1.25 lakh are taxed at 12.5% under current rules.
Inflation matters. A nominal CAGR above inflation grows purchasing power, while a lower CAGR may still leave real wealth flat or negative.

Stop estimating returns. Measure them.

Import your statements and Finest tracks the actual performance of your holdings across every broker and fund house.

Measure your actual returns

CAGR Calculator

Inputs

Results

Growth Trajectory

About the CAGR calculator

Frequently Asked Questions

Stop estimating returns. Measure them.

Related calculators